Question
QUESTION 1 Brief Exercise 10-10 Flounder Company traded a used welding machine (cost $12,420, accumulated depreciation $4,140) for office equipment with an estimated fair value
QUESTION 1
Brief Exercise 10-10Flounder Company traded a used welding machine (cost $12,420, accumulated depreciation $4,140) for office equipment with an estimated fair value of $6,900. Flounder also paid $4,140cash in the transaction.
Prepare the journal entry to record the exchange. (The exchange has commercial substance.)(Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
QUESTION 2
Exercise 10-3Stellar Corporation operates a retail computer store. To improve delivery services to customers, the company purchases four new trucks on April 1, 2017. The terms of acquisition for each truck are described below.
1.Truck #1 has a list price of $36,750and is acquired for a cash payment of $34,055.2.Truck #2 has a list price of $39,200and is acquired for a down payment of $4,900cash and a zero-interest-bearing note with a face amount of $34,300. The note is due April 1, 2018. Stellar would normally have to pay interest at a rate of9% for such a borrowing, and the dealership has an incremental borrowing rate of8%.3.Truck #3 has a list price of $39,200. It is acquired in exchange for a computer system that Stellar carries in inventory. The computer system cost $29,400and is normally sold by Stellar for $37,240. Stellar uses a perpetual inventory system.4.Truck #4 has a list price of $34,300. It is acquired in exchange for1,070shares of common stock in Stellar Corporation. The stock has a par value per share of $10and a market price of $13per share.
Prepare the appropriate journal entries for the above transactions for Stellar Corporation.(Round present value factors to 5 decimal places, e.g. 0.52587 and final answers to 0 decimal places, e.g. 5,275. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
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